To: Chief Executive Officers and Compliance Officers of National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties

Description: Interagency Key Fields

Summary

The Office of the Comptroller of the Currency (OCC) is issuing this bulletin to inform national banks, federal savings associations, and federal branches and agencies (collectively, banks) about "key fields" the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the OCC have determined examiners will typically use to test and validate the accuracy and reliability of home mortgage loan data collected beginning in 2018 pursuant to the Home Mortgage Disclosure Act (HMDA) rule issued October 15, 2015.

Note for Community Banks

This bulletin applies to all national banks, federal savings associations, and federal branches and agencies that are subject to HMDA data collection and reporting requirements.

Highlights

The FRB, the FDIC, and the OCC are issuing Designated Key HMDA Data Fields to support the efficient and effective evaluation of financial institutions’ compliance with the HMDA’s requirements. Of 110 data fields, 37 are identified as key fields. In certain circumstances, however, examiners may determine it necessary to review additional HMDA data fields, as appropriate.

Background

The HMDA, which is implemented by Regulation C (12 CFR 1003), requires certain financial institutions to collect, record, and report information about their mortgage lending activity.1 Amendments to Regulation C (HMDA amendments)2 establish the data to be collected.3 To ensure compliance with the HMDA’s requirements, traditionally the FRB, the FDIC, and the OCC have identified and focused examination-related testing of HMDA data on certain agency-designated key fields. Key fields are those fields considered to be most important to ensuring the integrity of analyses of overall HMDA data.

Separately, the Federal Financial Institutions Examination Council (FFIEC) members issued "FFIEC HMDA Examiner Transaction Testing Guidelines" (guidelines) for the FFIEC members’ examination staff to use in assessing the accuracy of the HMDA data that financial institutions record and report.4 The guidelines include a data sampling process that involves prioritizing designated data fields for review or reviewing all data fields within a sample. The guidelines themselves, however, do not establish designated key data fields. In an effort to promote efficiency, coordination, and consistency, the FRB, the FDIC, and the OCC have jointly identified and designated 37 of the HMDA data fields to be collected beginning January 1, 2018, pursuant to the HMDA amendments, as Designated Key HMDA Data Fields. In identifying the Designated Key HMDA Data Fields, the FRB, the FDIC, and the OCC considered a variety of factors, including the HMDA’s requirements, the goal of ensuring the efficiency of bank examinations, and the effective validation of HMDA data important to evaluating compliance with the Community Reinvestment Act and fair lending requirements. The FRB, the FDIC, and the OCC also took into account the likelihood that a data field would be reported correctly based on past examination experience.

Accordingly, to evaluate financial institutions’ compliance with HMDA requirements, FRB, FDIC, and OCC examination staffs will focus on the Designated Key HMDA Data Fields during transaction testing pursuant to the HMDA for data collected on or after January 1, 2018.5 In certain circumstances, however, consistent with the FFIEC guidelines, such examination staff may determine that it is necessary to review additional HMDA data fields, as appropriate.

As suggested above, proper reporting of HMDA data is important in assessing the accuracy of the HMDA data that financial institutions record and report. Where errors that exceed established thresholds6 are identified in an institution’s HMDA data, the OCC supervisory office has discretion to require the institution to correct specific errors, without requiring resubmission of the data. The supervisory office may require resubmission of HMDA data when the inaccurate data are indicative of systemic internal control weaknesses that call into question the integrity of the institution’s entire HMDA data report.

3 Beginning with data collected on or after January 1, 2018, financial institutions subject to the HMDA will collect and report data on covered loans specified in 12 CFR 1003.4(a)(1)-(38) on a loan application register containing 110 data fields, as specified in the Federal Financial Institutions Examination Council Filing Instructions Guide (FIG). The FIG is available on the FFIEC website or the Consumer Financial Protection Bureau (CFPB) website.

4 The FFIEC members are the FRB, the FDIC, the OCC, the CFPB, the National Credit Union Administration, and the State Liaison Committee. The FFIEC members promote compliance with federal consumer protection laws and regulations through supervisory and outreach programs. The HMDA is among these laws and regulations.

5 Each agency shall operate in accordance with its supervisory authority.

6 The information provided in this bulletin supplements guidance issued on August 25, 2017, through OCC Bulletin 2017-31, "FFIEC HMDA Examiner Transaction Testing Guidelines," which indicates examiners should direct a bank to correct any data field in its full HMDA Loan/Application Register (LAR) for any field where the error rate exceeds the stated resubmission threshold. The bank may also be required in such cases to resubmit its HMDA LAR with the corrected data field(s). However, OCC examiners will consult with their supervisory office, and as applicable Compliance Supervision Management, to determine whether resubmission is required based on specific facts and circumstances.